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25040Venturebeat.comAnalysts impressed with Amazon's Fire Phone, but the high price may be a problemhttp://venturebeat.com/2014/06/18/analysts-impressed-with-amazons-fire-phone-but-the-high-price-may-be-a-problem/
http://venturebeat.com/2014/06/18/analysts-impressed-with-amazons-fire-phone-but-the-high-price-may-be-a-problem/#respondThu, 19 Jun 2014 05:14:55 +0000http://venturebeat.com/?p=1494525Most were impressed with various innovative features in the phone, but luring loyal iPhone and Android phone users is a tall order.
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SEATTLE — IDC analyst Tom Mainelli asked the right question before the start of Amazon’s launch event for the Fire Phone this morning here in Seattle: “Will the Amazon phone offer enough to get people to give up their iPhones and Android phones?”

Following the event, I asked Mainelli how he’d answer that question after seeing the phone in action.

“I don’t think it’s enough — yet,” he said. “But they don’t have to get it exactly right the first time.” Future improvements by Amazon could eventually pose a threat to Sony’s and Samsung’s market shares, he indicated.

The head movement-tracking and 3D graphics Amazon CEO Jeff Bezos showed off in his lengthy demo this morning looked impressive. But when I actually tried the phone for myself this afternoon, I found the head movement tracking to be less a part of the real experience of using the phone than I thought. I found myself tapping and swiping on the screen more than I was moving my head around to navigate.

Here, too, Mainelli is hopeful. He points out that Amazon released an SDK for developers today, and it may be up to those developers to make apps that are more creative about exploiting the head tracking and 3D imagery capabilities of the new phone.

A good ‘vending machine’

The most important factor to the the new phone’s success, according to Gartner mobile analyst Tuong Nguyen, will be whether it provides a good place to buy and consume Amazon products. He give Amazon high scores here.

“Amazon has a very strong ecosystem, and they have brought that ecosystem to this phone,” Nguyen told VentureBeat. “In this sense they have set a bar and a standard that the rest of the device industry will need to meet to be successful.”

Some people I talked to here were pleased and a bit surprised that Amazon had sourced very good hardware and components for the phone.

So was Nguyen: “I was surprised on the hardware. No apologies necessary here. I think the hardware is robust and that technophiles should be happy.”

The cost problem

But that hardware is fancy and expensive. The cost of the sensors and cameras and 3D screens shows up clearly in the price of the product. Nobody’s saying that the announced prices on the Fire Phone are good deals.

A $200 price tag on a 32GB phone with a two-year contract certainly isn’t one of the phone’s selling points. That price is as much as any high-end phone from Apple or Samsung.

Amazon’s Bezos said in an interview that the phone is packed full of killer, cutting edge technology, but he declined to say whether his company would make a profit on the phones.

IDC’s Mainelli believes Amazon will make money on every phone sold. AT&T may be pitching in some subsidy money as well.

The high price point may end up dooming the Fire Phone.

Current Analysis analyst Avi Greengart was also a bit taken aback by the pricing, especially because the phone is meant as an enabling device that will spur users to buy Amazon products, digital and otherwise. One would think that Amazon could afford to discount the phone and make the money back on increased sales of books, games, apps, movies, and music.

Greengart isn’t completely sold on the 3D functionality, either. “They are mainly promoting the 3D technology with this phone, but other than the mapping functions, it’s not immediately clear if the technology is really useful, or just cool,” he said.

Lighting a ‘Fire’ under handset makers

In order to lure iPhone owners to the Fire Phone, Bezos needed to prove to the world today that his company had made a device that is leaps and bounds ahead of the competition in ease-of-use and functionality. If consumers don’t see it that way, the Fire Phone will just be an expensive 3D phone.

But taking a broader view of the whole thing, Bezos and company have definitely brought some new ideas to the party, and that might push other players in the industry to innovate better and faster.

“It is always great when a new company enters the market as provides a fresh look on a true and tried product,” Recon Analytics founder Roger Entner told VentureBeat via an email statement.

]]>http://venturebeat.com/2014/06/18/analysts-impressed-with-amazons-fire-phone-but-the-high-price-may-be-a-problem/feed/01494525Analysts impressed with Amazon's Fire Phone, but the high price may be a problemÜberinvestor Warren Buffet on Apple: ‘If you can buy dollar bills for 80 cents, it’s a good thing to do’http://venturebeat.com/2013/03/04/uber-investor-warren-buffet-on-aapl-if-you-can-buy-dollar-bills-for-80-cents-its-a-good-thing-to-do/
http://venturebeat.com/2013/03/04/uber-investor-warren-buffet-on-aapl-if-you-can-buy-dollar-bills-for-80-cents-its-a-good-thing-to-do/#respondMon, 04 Mar 2013 16:14:06 +0000http://venturebeat.com/?p=632369Investor Warren Buffet, recently the world's richest man, seems to think that Apple stock is going to do just fine.
]]>Investor Warren Buffet, recently the world’s richest man, seems to think that Apple stock is going to do just fine.

Asked on CNBC’s Squawk Box about Apple, its depressed stock price, and the fantastically large $137 billion cash stash that is bulging Apple’s back pocket, Buffet seemed to suggest that its stock is a good buy, although he doesn’t own any himself.

“If you could buy dollar bills for 80 cents, it’s a very good thing to do,” Buffet said.

That’s a generically true statement, of course. But Buffet said it in the context of recounting a conversation with Steve Jobs some years ago about what Apple should do with its rainy-day fund, and when answering a question about what Apple should do with all that money.

Years ago, Buffet had advised Steve Jobs to buy back Apple stock. It seems he would advise current Apple CEO Tim Cook to do the same, but he did add something just a little bit different: “The best thing you can do with a business is run it well, and the shares will respond.”

One other tidbit that Buffet shared: Part of the reason that Apple has so much tax is that “two-thirds of it has not yet been taxed,” which seems to be a common refrain around the tech world these days.

]]>http://venturebeat.com/2013/03/04/uber-investor-warren-buffet-on-aapl-if-you-can-buy-dollar-bills-for-80-cents-its-a-good-thing-to-do/feed/0632369Überinvestor Warren Buffet on Apple: ‘If you can buy dollar bills for 80 cents, it’s a good thing to do’Trouble in Toyland: Apple stock down $19B, iPhone orders cut, price targets reducedhttp://venturebeat.com/2012/12/14/trouble-in-toyland-apple-stock-down-19b-iphone-orders-cut-price-targets-reduced/
http://venturebeat.com/2012/12/14/trouble-in-toyland-apple-stock-down-19b-iphone-orders-cut-price-targets-reduced/#respondFri, 14 Dec 2012 19:19:12 +0000http://venturebeat.com/?p=590458Wall Street and Apple are not cozy bedfellows this morning. Apple's stock is down another $20 billion this morning in early trading on reports of iPhone component order cuts and softening demand.
]]>Wall Street and Apple are not cozy bedfellows this morning. Apple’s stock is down another $19 billion this morning in early trading on reports of iPhone component order cuts and softening demand.

This morning UBS analyst Steve Milunovich trimmed his Apple stock targets by $80, saying Apple will sell five million fewer iPhones and two million fewer iPads over each of the next three quarters. Then another analyst, Peter Misek, said companies that supply components for the iPhone 5 have reported “large order cuts” over the last two days.

And this morning we reported that the cheaper iPad mini is outselling the iPad 4 — and may account for half of all iPad sales in 2013. That’s the kind of good news that’s not good news, as the lower-cost and lower-margin item is cannibalizing sales of the higher-cost, higher-margin item.

It all adds up to a tempest in a not-so-small teacup for Apple stock, which had already seen a 20 percent drop from October to November and just this morning lost another $20, hitting a low of $507.66 today, down from a high of $702.10 just three months ago on September 19.

Above: Apple stock (blue) versus NASDAQ (orange)

Image Credit: Google Finance

That means Apple is now down 25 percent from its all-time highs and has dropped another $20 billion in market value — almost as bad as December 5, which saw Apple lose $35 billion in market capitalization, or, as we put it then, a Yahoo, Yelp, and LinkedIn worth.

iPhone and iPad sales, plus iPod, make up 76 percent of Apple’s revenue. Any hiccups in those cash cows, and Apple stock has a serious case of the Mondays — even on a Friday. The core problem is that Android is eating iPhone’s lunch and is starting to more than nibble at iPad’s. And analysts are worried that Apple will not be able to maintain the market leadership position it has held for a couple of years now.

]]>http://venturebeat.com/2012/12/14/trouble-in-toyland-apple-stock-down-19b-iphone-orders-cut-price-targets-reduced/feed/0590458Trouble in Toyland: Apple stock down $19B, iPhone orders cut, price targets reducedAmazon goes full frontal on iPad mini … right on its home pagehttp://venturebeat.com/2012/10/29/amazon-goes-full-frontal-on-ipad-mini-right-on-its-home-page/
http://venturebeat.com/2012/10/29/amazon-goes-full-frontal-on-ipad-mini-right-on-its-home-page/#respondMon, 29 Oct 2012 15:02:20 +0000http://venturebeat.com/?p=564999Heavyweight bouts usually consist of 200-pound plus monsters bashing each other in public for our entertainment. Now we can add multibillion-dollar corporations to the show.
]]>Heavyweight bouts usually consist of 200-pound plus monsters bashing each other in public for our entertainment. Now we can add multibillion-dollar corporations to the show.

Amazon has launched a full frontal assault on Apple’s new iPad mini.

The massive online retailer is not just comparing the Kindle Fire HD with Cupertino’s latest. It’s not just saying ours is better than yours. And it’s not just hiding its message under the proverbial bushel. Amazon is using its home page — perhaps the most valuable digital real estate on the planet — to absolutely ambush the iPad mini.

Above: Amazon’s front-page attack on Apple’s iPad mini

Image Credit: Amazon

This is not just trash talking. This is in-your-face dialed up to 11, fist in the face, calling Apple out, dropping the gloves and saying “let’s go.” And gadget blog Gizmodo is helping, in a way.

Amazon is hitting Apple where it hurts: the display, the dual speakers, and yes, most of all, the price, the price, the price. It’s what we said when we first saw the iPad mini: light, portable, awesome, expensive. And it’s the difference between a company that makes money on the device — no points for guessing Apple, people — and a company that sells hardware at cost so that it can make money on content sales.

The real question, if you’re an Amazon shareholder, is whether Jeff Bezos can ever turn the biggest digital marketing platform on the planet into a content cash cow. Or, when he wants to.

For Apple shareholders, of course, the question is whether Apple’s legendary brand, its content and apps ecosystem, and its industry-best quality, fit, and finish are enough to overcome a $130 price gap.

Apple stores are now price-matching Sprint’s discounted online pricing for iPhone 4S when asked. Officially — and online — the price is still $199 for the cheapest iPhone 4S, the 16GB model, but in Apple Stores around the county, you can get a $49 discount on any iPhone 4s model.

Above: Official online iPhone 4S pricing

Image Credit: Apple

While the iPhone is a bit better of a deal today, the bigger story is that the iPhone 5 must be very, very near. Apple, which typically keeps 4-6 weeks of channel inventory, looks to be clearing out old stock in preparation for the new model.

The updated pricing takes the 16GB model down to $149, the 32GB to $249, and the top-of-the-line 64GB model to $349. An Apple employee at the Apple Store at University Village in Seattle verified the price cuts verbally on the phone.

(Note: All prices are based on a two-year contract.)

But don’t expect to see any 25 percent off signs at your local Apple store. You may have to ask for the deal to get it.